Multinational Firms and the Theory of International Trade
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Multinational Firms and the Theory of International Trade

By James R. Markusen





Despite the great importance of multinational firms in international economics, theoretical and empirical research on these firms has generally been conducted separately from that on international trade. In this book, James Markusen provides a comprehensive integration of the two fields. Drawing on twenty years of research, he focuses on the interaction of scale economies, trade costs, factor endowments, and imperfect competition. He analyzes decisions about whether to build or acquire a foreign plant separately from decisions about where to raise the financing.

Markusen begins with the simplest possible partial equilibrium models and works systematically toward a full-fledged general equilibrium model with both horizontal and vertical foreign direct investment. He offers empirical tests of hypotheses derived from the theoretical models. The notation is unified throughout, distinctions between models are explained with thoroughly explained derivations, and numerous graphs support the analysis.


$11.75 S | £9.99 ISBN: 9780262134163 462 pp. | 9 in x 6 in 79 illus.


$35.00 X | £27.00 ISBN: 9780262633079 462 pp. | 9 in x 6 in 79 illus.


  • [T]he book will be of tremendous interest to professionals in the field...

    Civil Engineering Magazine


  • Markusen has penned a dream book on multinationals for students and specialists alike. The questions are essential, the results rich, and the exposition exquisite.

    Donald R. Davis

    Professor of Economics, Columbia University

  • Multinational enterprises account for one of the fastest growing segments of world trade. Markusen provides a comprehensive theoretical framework to explain the role that multinationals play in the process of globalization. This book is a must read for anyone interested in the field.

    Gordon Hanson

    University of California, San Diego


  • Winner, Certificate of Excellence presented by the TIAA-CREF Institute, 2003